Under the terms of the restructuring, adjustments will be made to the terms of the company’s outstanding 10% senior secured bonds, the exercise price of its outstanding share purchase warrants will be changed and additional securities of the company will be issued.

Cline president and chief executive Ken Bates blamed the necessity of the move on macro factors hammering the industry as a whole.

“The restructuring is an important step in the company’s efforts in developing a long-term financial solution to address the uncertainty regarding the magnitude and extent of the downturn in the coal markets,” he said.

Despite an optimistic buzz in previous reports, Cline officials said last week that a $2.5 million payment on its outstanding $50 million principal for the 10% senior secured bonds did not get paid as required.

Missing the semi-annual interest payment has left the company in default as it works with Toronto-based credit and portfolio manager Marret Asset Management to consider available options.

Cline’s management expects the restructuring to provide the necessary funding in both the short-term and long-term to address the miner’s financial difficulties, including the sustaining of the company for about three years of operations under care and maintenance or, alternatively, providing the company with sufficient funding to ramp up operations to production.

Cline said it was continuing to advance discussions with customers for the sale of its metallurgical coal and will provide an update to the market in the first quarter of 2013.